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Throughout his
campaign, President Donald Trump promised to pour $1 trillion into rebuilding
the nation’s infrastructure. Now, for the first time, the White House has put
into writing an outline of the president’s infrastructure plan.

The president’s budget proposal sets aside $200 billion in
federal funding for direct infrastructure spending over the next 10 years and
vows to meet Trump’s stated goal by incentivizing private development and
proceeding with projects the prior administration rejected, such as the
Keystone XL pipeline. The administration is also drafting plans to incentivize
states and cities into selling their assets to private firms (through federally
funded bonuses to the states and cities that do so) and then funneling the
proceeds of the sales into other infrastructure projects. The administration
admits that the infrastructure plan relies heavily on what it calls
“self-help.”

"Great
rebuilding of America"

In a June 7,
2017 speech in Cincinnati, Trump said that businesses “are ready to invest in
creating jobs, but we’ve been waiting for a responsible partner in federal
government.” Trump called on Democrats and Republicans to join together “in the
great rebuilding of America.”

Trump
clarified that he will task a team, led by real-estate developers Richard
LeFrak and Steven Roth, to oversee all projects included in his infrastructure
bill to ensure timely and efficient delivery, vowing that “we’ll have people
watching over each of these jobs, and every penny will county to them.”

In addition,
the administration has outlined broad details of Trump’s rebuilding proposal
that involve rolling back regulations that can slow down transportation
projects and streamline the construction approval and permitting process. In
particular, the administration is considering allowing permitting process steps
to occur simultaneously instead of sequentially and enforcing page-limit
restrictions for environmental reports, which can often reach tens of thousands
of pages. The idea behind such options is to streamline the regulatory process
to reduce costs and improve the environmental outcomes by delivering the
improvements more quickly so that resources are spent on environmental
mitigation rather than paperwork. Trump noted in his Cincinnati speech that the
goal of these procedural changes will be to bring the timeline from as long as
10 years down to two years, calling it “massive permit reform.”

Ed Mortimer,
executive director of Transportation Infrastructure at the U.S. Chamber of
Commerce, said public-private partnerships are likely to always be part of the
transportation funding solution but that only a small number of projects in
densely populated areas can work as public-private partnerships. He estimated
that there are “only about 10 percent of transportation projects that would
even be amenable to P3s.”

Sources have also indicated that the administration’s
infrastructure proposal will include mandated prevailing wage rates. That
concession is thought to be necessary to bring Democrats on board with the plan.

Hurdles
ahead for Trump's infrastructure plan

There will
still be hurdles before this infrastructure plan is put into place. Senate
Democrats contend that the president’s budget also proposes cutting the
Department of Transportation’s infrastructure budget by more than 12 percent
and the Army Corps of Engineers’ by more than 16 percent. Those Senate
Democrats released an analysis showing a net cut to infrastructure programs of
$145 billion over 10 years, including Amtrak, the Highway Trust Fund, and others.

The
infrastructure proposal will be divided into four funding categories:

The
administration has said it plans to have a legislative package ready by the
third quarter. However, experts have suggested that even the
Republican-controlled Congress may not support some of its proposed cuts.
Senator Susan Collins (R-Maine), the lead appropriator on the Senate
Appropriations panel that sets Department of Transportation spending said the
appropriations committee would look at the president’s budget, but she expects
that the committee will come up with its own approach, adding “in all the time
that I’ve been here, I’ve never seen a single president’s budget survive the
appropriations process.”

State and local
governments, industry trade groups, and concerned citizens will certainly watch
with great interest as the debate over the country’s infrastructure continues.
Public-private partnerships remain a relatively new and seldom-used delivery
method for projects, and all involved will need to gain expertise quickly to
capitalize on the opportunities that are sure to exist in the coming years.

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.

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